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Cryptocurrency ‘deal’ plays out in court

Published May 23, 2022


A DISPUTE over an alleged cryptocurrency investment was recently in the Durban High Court.

Visham Panday, an uMhlanga businessman, brought the application against Lockhat Mayat Attorneys and Brenen-Lee Wallace Govender which was heard in the Durban High Court. Panday sought to preserve the monies held by Govender’s attorneys in Trust, so he could institute action for recovery of an alleged cryptocurrency investment paid to Govender.

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In his founding affidavit, Panday claimed that he met Govender in October 2021 and Govender told him that he traded in cryptocurrencies.

Panday claimed Govender promised a guaranteed return of 2% on all monies invested during the month he made an investment.

According to Panday, he invested R8.9 million between October 2021 and February 2022. He further claimed that, based on what Govender had told him, his return would be paid via a trust account held by Lockhat Mayat Attorneys. Panday claimed that on at least five occasions he was promised payment by Govender but nothing materialised.

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In February 2022, Panday’s attorney, Vasu Naidoo, wrote to Lockhat Mayat Attorneys requesting answers. Panday claims his attorney did not receive any feedback.

Lockhat Mayat Attorneys denied this and provided a full history of correspondence to Vasu Naidoo. In the correspondence they said no money was held in trust for Panday and that he was not an existing client of theirs.

Panday then approached the Durban High Court to interdict Lockhat Mayat Attorneys from paying out, disbursing, or in any way dissipating or dealing with his money held by the Trust.

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Lockhat Mayat Attorneys informed the High Court that they would abide by any decision of the court but opposed the matter insofar as the allegations made in Panday’s papers were false, misleading and defamatory.

In the opposing affidavit, Fathima Lockhat said in September 2021 that she was approached by Govender to provide confidential legal advice about a business venture between himself and a third party.

She said her offices were instructed to draft a loan agreement and facilitate the arrangement between these clients. Lockhat said the money was paid into their trust account via various electronic transfers following all the proper steps and verifications in place as required by Fica.

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Lockhat claimed the amount held in this respect on behalf of their clients was only R112 000.00.

Lockhat said that Panday was never a client of their firm and other than holding money in the Trust for Govender, an existing client, she played no other active role in the matter.

She said the High Court matter was essentially between Panday and Govender. She denied having met Panday or having had any dealings with him.

She denied meeting him and responded to his allegations of meeting someone as a possible case of mistaken identity, as she has no knowledge of who Panday dealt with.

Lockhat claimed that any agreement that may have been entered into between Panday and Govender was done without her knowledge or that of Lockhat Mayat Attorneys.

In a confirmatory affidavit, Govender said he never introduced Panday to Lockhat or attended any meetings with them. Govender said that, to the best of his knowledge, Lockhat had never met Panday. He further claimed that he never received cash from Panday nor handed or paid monies to the law firm on behalf of Panday.

In a consent order reached between the parties, the court ruled that Lockhat Mayat Attorneys would continue to hold the amount of R112 000.00 in Trust and that Panday was to institute action against Govender on or before May 26, 2022, failing which the order would lapse.

* On Wednesday, May 18, 2022, POST published an article with the headline “Lawyer’s trust account frozen”. The article has proven to have contained false, incorrect and unverified statements which were misleading and defamatory of the firm Lockhat Mayat Attorneys and attorney Fathima Lockhat.

We record that there were various inaccuracies in the article and in particular, we record that Lockhat Mayat Attorney’s trust account was never frozen and no court order was granted against the firm as reported in the original article.

POST hereby retracts the article and apologises unreservedly to the firm Lockhat Mayat Attorneys and attorney Fathima Lockhat for its error of judgement and failure to verify facts in the matter.

The Post

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Crime and courts